Including Employees in your Sale

I’ve been working with a seller who is starting to plan his retirement and is thinking about helping three of his key and longtime employees become owners of the company.  But he also wants to enjoy enough proceeds from the sale to enjoy that retirement!  So, we’re discussing three possible options, whereby 30% of the ownership would go to the employees and 70% would be purchased by an outside entity:

  1. The ESOP (30%), an Employee Stock Ownership Plan that has similarities to a profit-sharing plan, along with (70%) sold to an outside buyer. The Employee Stocks are held in a trust.
  2. A full purchase by an outside buyer, with select employees receiving 30% of shares in the company and who would also have employee contracts.
  3. A Joint Venture approach, with select employees entering into a purchase partnership with a Private Equity Group.

There are always a number of ways to structure a transaction to make it work for all parties involved.  If you’re thinking about your retirement…give me a call.  We can figure your options out, together.